Start-up funding in the UK: What’s available?
For new businesses, finding start-up funding in the UK can be difficult. To help you find the best funding for your business, we’ve put together a handy guide. Keep reading to find out more!
What funding is available for start-ups in the UK?
Government funding
If you’re searching for start-up funding in the UK, there are plenty of government funding options available, including:
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Research and Development (R&D) tax credits
These schemes support new businesses that are performing research and development services. Delivering more than £5 billion in financial support, this start-up funding in the UK is an attractive option for many.
With R&D Tax Relief, businesses can be reimbursed up to 33% of their research and development costs. For example, businesses can claim back wages and subcontractor fees.
The scheme is available to businesses across a range of sectors. To be eligible, you need to:
- Be incorporated in the UK
- Be liable for UK corporation tax
- Meet HMRC’s definition of R&D.
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Innovation grants
Another option for start-up funding in the UK is an innovation grant. Innovation grants are designed to help businesses convert ideas and concepts into commercial products.
There’s a common misconception that ‘grant worthy’ ideas only come from larger businesses. However, that isn’t the case. In fact, some innovation grants are reserved for start-ups and SMEs in the early stages of development.
Innovation grants are also useful for start-ups in the UK as they act as validation. If the grant-awarding body is choosing to fund your business idea, it suggests that your work is significant. This can massively boost your company’s credibility in the field.
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Creative industry tax relief
Some start-up funding in the UK is offered to specific sectors and services. An example of this is creative industry tax relief.
With this scheme, there are eight kinds of creative tax relief available, each catering to a different field. These include:
- Video games
- Films
- High-end television
- Children’s television
- Animation television
- Theatrical productions
- Orchestral concerts
- Museum or gallery exhibitions.
This relief works by refunding up to 20% of your eligible costs as a tax reduction or cash lump sum.
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The government’s Start-Up Loan scheme
Another option for start-up funding in the UK is the government’s Start-Up Loan scheme. This scheme was introduced to encourage entrepreneurship in the UK. While the recipient will need to repay the funds, it’s still a worthwhile consideration for many new businesses.
With this scheme, the government offers between £500 and £25,000 in loans to new or small businesses. The loan can be repaid over one to five years, with a fixed interest rate of 6%.
To apply for this scheme, you’ll need to submit a detailed business plan and cash-flow forecast. This is to prove that you’re able to afford the monthly repayments. If you’re accepted onto the Start-Up Loan scheme, you’ll be paired with a business mentor for 12 months.
What other funding is available?
Business start-up grants in Scotland
Are you based in Scotland and searching for start-up funding in the UK? If so, there are Scotland-specific start-up grants that you might be interested in. These grants are provided by the government, local councils and some private organisations.
At the end of February 2021, a new Scottish funding model was introduced. This model creates a more simple and inclusive funding system, creating jobs and a greener economy. For the most part, grants in Scotland have the following objectives:
- To create jobs
- Specialise in research and development
- To create social, environmental and economic benefits
- Encourage collaboration, leading to new technology and ideas.
Business start-up grants for unemployed individuals
You might be interested in start-up funding in the UK that is aimed at unemployed individuals. If that’s the case, you could apply for mentoring services and an allowance through the New Enterprise Allowance. This is a government scheme designed to help the long-term unemployed back to work.
You might be eligible for this scheme if you’re 18 and over and either:
- Receive Income Support and you’re a lone parent, sick or disabled
- Or your partner gets Universal Credit, Jobseeker’s Allowance or Employment and Support Allowance.
The New Enterprise Allowance aims to provide individuals with a mentor. This mentor will offer support and advice to help you set up your business and start to trade. You’ll be required to create a business plan that your mentor will need to approve. Once this has been approved, you:
- Could get a weekly allowance worth up to £1,274 over 26 weeks
- Can apply for a loan to help with start-up costs.
In conclusion…
If you’re searching for start-up funding in the UK, there are plenty of different options available. For government schemes, you might be interested in R&D tax credits, creative industry tax relief, or innovation grants. The UK government also offer a Start-Up Loan scheme to encourage entrepreneurship among individuals in the UK.
If those schemes aren’t for you, you might be interested in other types of start-up funding in the UK. These include business start-up grants in Scotland or the New Enterprise Allowance for unemployed individuals. No matter who you are or what your business does, there’s probably a type of funding out there for you.
Our Services
Our Grant Writing Service is for businesses who want to start applying for grants, but don’t know where to begin. If you don’t have the resources or the time in-house to write a winning grant – we can help.
Our Grant Writing Consultants have over 60 years of experience in bidding for funding and grants. From grants for charities, start-up business grants and council business grants. They can take care of the whole thing for you – they’ll even submit it on your behalf. You could be eligible for Business Gateway Grants or check out available Grants for Business in the UK.
Get in touch to find out how we can help your business grow!
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